In some charterparties, a certain percentage of commission is due to charterers on the amount of freight or hire. Address commission is almost equivalent to a reduction in the rate of freight, a few special services are performed by charterers in return. However, the charterer will deduct the amount before paying the shipowner what is due. The commission is like a rebate for the business from the charterers.
If no address commission is due, the vessel is “free of address”.